Fund Manager: China Offers 'Hidden Gems'

Most businesses are salivating over the opportunities for growth and profit in China. Even Google backtracked on its “Don’t be evil” motto by allowing some censorship in its internet search results in China to make sure the company got a foothold there. The five top-performing funds rated by Morningstar were all China-focused – and all had total returns of at least 68%. Jim Oberweis – who runs one of those funds – shared the secrets to his success on “Squawk on the Street.”

China Opportunities

With the top five perfoming funds focusing on China, the country has become the new land of opportunity, with Jim Oberweis, The Oberweis Report Editor and CNBC's Erin Burnett

While other traders are buying into large companies, Oberweis focuses on smaller, less followed companies that are a step down in market cap. He chooses entrepreneurial firms over state-owned behemoths. These smaller ventures usually list on the Hong Kong and Singapore exchanges to get access to foreign capital.

The strategy seems to be working. The Oberweis China Opportunities Fund saw total returns of almost 79% in 2006.